Rules need a re-write, say IP experts at forum

SAN JOSE, Calif.  The rules of the road in intellectual property need a re-write, according to speakers at the Intellectual Property Symposium. Government needs to overhaul the overarching patent system and industry needs to hammer out new practices at silicon, software and system levels, said experts gathered at the inaugural event here.

The event came just days after Senate leaders effectively shelved the controversial Patent Reform Act that aimed to address a wide variety of issues ranging from patent quality to litigation. In a keynote address, Jon Dudas, director of the U.S. Patent and Trademark Office, said the agency could see a record 500,000 patent applications this year, but their quality is deteriorating and compromise on how to rework the system remains elusive.

"It's becoming less about the quality of patents and more about the quantity of them," said Dudas. "Everybody uses the patent system quite differently, and they all want Congress to bless their model," he added.

Michael Meurer, an author and professor of law at Boston University, said in another keynote that the system is fundamentally broken because it fails to let people know exactly who owns what thanks to fuzzy patent claims and penalties on unintentional infringers.

"Some of us are starting to think about what kind of [patent reform] language we might draft, but we haven't gotten far enough along that we are ready to suggest what Congress should do," Meurer said.

A third keynoter, Peter Detkin of startup Intellectual Ventures, said the current system makes it hard for small innovators to get and assert patents. He claimed his company's approach of buying, developing and asserting patents puts it among an emerging group turning patents into products that level the playing field between small inventors and big companies.

Such startups are part of a broader trend of big and small companies who are starting to manage IP as a corporate business function rather than treat it as a job for the legal department. For example, Hewlett-Packard formed a central IP group a few years ago to handle all corporate IP decisions. It is currently engaged in more than 100 IP negotiations, each with a technical, legal and business lead, said Joe Beyers, who heads the group.

Other nations, such as China, are going through their own transition in IP.

"When I first went to China in the 1970's there were only a handful of IP lawyers there," said Richard Thurston, general counsel of Taiwan Semiconductor Manufacturing Corp. "When you think about the legal infrastructure they are trying to build today, it is phenomenal," he added.

China's leaders hope to outpace the U.S. by 2050 as a producer of IP. But their evolving IP system will not be a carbon copy of ones in the West, he cautioned.

"China wants a rule of law but not one imposed by the West, so our desire to transfer a U.S. rule of law will never happen," Thurston said.

For its part, the semiconductor industry is still relatively immature in how it handles its IP, and needs both greater legal discipline and more technical standards to keep pace with rising complexity, speakers said.

"I give this industry a C," said Charlene Morrow, an attorney at Fenwick and West LLP. "They do a decent job of protecting trade secrets, but not of training employees about what to do. They generally do a bad job of providing copyright protection for soft IP, and they don't do a very good job of handling contracts," she added.

A panel of engineering managers called for new standards to expedite the business of building systems-on-chip out of third party silicon IP blocks.

"The silicon systems are becoming so complex we can't model them and expect them to work in a timely way, so we need to increase the level of software abstraction," said Gadi Singer who manages a new SoC enablement group at Intel Corp. "One thing needed to make this all work is a strong commitment to collaboration on standards," he added.

Victor Berman, chief executive of Improv Systems and head of a new IEEE effort to set silicon IP standards laid out a laundry list of standards the industry needs in areas including IP quality, verification and design for manufacturing.

"There are issues not addressed by standards that are becoming dominant problems in design," Berman said.

In software, experts on an open source panel agreed that the latest GPL version 3 license has fueled fears among large corporations who say some of its provisions could put many of their software patents in jeopardy. Both sides agreed companies increasingly use a complex mix of proprietary and open source code that can be complex to manage.

"We worked with one company who thought they had 25 instances of open source code in their software, but it turned out they had 75," said Beyers of HP. "This has to be managed with a lot of rigor and precision," he added.

In one well known example, Linksys had to release as open source code valuable proprietary software used in one of its home routers because it infringed a Linux license, said Mark Gisi, a senior IP manager for Wind River. "It shifted the whole market," he said.

"By and large a number of engineers are starting to come up to speed on open source IP issues and the legal community is starting to come up to speed on it, too, but these two groups need to work together to resolve the issues," Gisi said.

A separate panel debated the issue of digital rights management in consumer electronics systems. Representatives of Hollywood studios and consumer systems companies took differing positions on what constitutes fair use in the digital media era.

I think law makers understand the ideal here of wanting to protect and encourage the process of innovation which has traditionally been the domain of independent inventors. However, these days the reality is innovations come from teams of people working across geographies and companies. In my view no one in this debate is without an ax to grind, even the storied independent inventor. The magnitude of the problem is huge, especially considering the very diferetn dynamics of different kinds of industries where innovation is key. How can we define for the 21st century what a patent is as a unit of innovation and how it should be handled? Thoughts?